Parts & Service Specials

How Bad Credit Car Dealerships Help Buyers with Poor Credit Score

Trying to get a loan when you have a bad credit can be downright daunting. In some cases, this is almost impossible as no creditor would want to risk default. When it comes to auto loan, however, there’s a little bit of hope for everyone. Some car dealerships are generous enough to offer assistance in getting proper financing for buyers with low credit scores.

Known as bad credit car dealerships, these companies are among the remaining few who believe that poor credit rating isn’t reflective of a person’s character or work ethic and therefore shouldn’t be the main basis for approving loan applications. But how does this type of car loan work? How does it benefit you?

The Car Dealership Takes Your Place

You may be wondering how it is possible to take out a loan through this process when you can’t find a creditor who would approve your application anywhere. Well, there’s a simple reason for that. Creditors are not running away from you. But they close their doors to people they cannot trust.

Creditors only open doors to people or entities they can trust to make payments—entities like car dealerships. Essentially, in a bad credit auto loan transaction, it is the car dealership that’s borrowing money for you. They are representing you to guarantee the creditors of a secure investment. They are taking the risk the creditors cannot take.

Is there a catch?

Well, you can’t exactly call it a catch. Of course, the car dealership will have to make sure that they get the payment to make the transaction work for them as well. You should expect a bigger interest rate or a stricter payment policy. Think of it this way—they’ve already took the risk just so you can finally take out the auto loan you need to buy a car.

Rather than not finding an auto loan at all, they made it possible for you. That’s the extra service you have to pay them for. In most cases, you won’t be asked to pay for it. All you have to do is to honor your agreement with the car dealership and avoid delays in payment or worse default.

The Next Step

Now that you don’t have to go through all the trouble of finding a creditor, you can go straight to the car dealership and settle everything there. A specialist will assist you in accomplishing all the necessary documents, including your contract with the dealership.

The dealership understands your financial situation, but it’s no good to keep it that way. You have to start fixing your poor credit as soon as possible. You can actually do this by making sure to pay off your auto loan regularly and on time. If you have existing debt, start paying it off instead of moving it around. Even if you consolidate your debts, it will barely push up your credit rating because the debt hasn’t essentially been covered.

Not all car dealerships offer to help buyers with bad credit. Thanks to companies like McLoughlin Chevrolet, car buyers in Portland don’t have to go through perdition just to get pre-approved for a loan. If you’re looking to purchase a new Chevy yourself soon, know that there’s a dealership in Portland that can help make the process simpler.

Sources:

How to buy a car with bad credit, consumeraffairs.comHow to Get a Car Loan With Bad Credit, bankrate.com